Upcoming FOMC Minutes: Let’s Scalp Gold!

Today’s upcoming FOMC minutes at 2:00 PM EST certainly has many gold traders sitting on their hands during the U.S. session. It looks as though December gold futures are taking a nap, only posting a 66 tick daily range.

So, what is on tap for later on, and how can we grab a quick profit?

FOMC Minutes: What To Expect

The FOMC minutes are the script from the last FOMC meeting. While the FED’s interest rate announcement jolts markets around the globe, the minutes are seen as a roadmap for future monetary policy.

Traders will be looking for hints at what is likely to happen to U.S. interest rates at the September meeting. As I have covered in-depth, a rate hike in September is a formality. Also, an unwinding of the FED’s balance sheet is another topic of debate.

Here is what we are looking for: Size and Scope. Will we see an atypical raise in rates or dumping of “toxic” assets? Or are we looking at a quaint ¼ point raise of rates? Anything that suggests a move out of the ordinary for the FED in September will likely move markets.

Tread lightly, and watch the money management.

Scalping Setup, December Gold Futures

As I mentioned earlier, December gold futures are taking a break at the moment. Currently, December gold is trading inside of yesterday’s range.

December Gold Futures Daily Chart-Is There A Trade?

Below are a few technicals worthy of note:

• Tuesday’s session low of 1272.7

• 62% Fibonacci retracement of current wave 1272.8

• Bollinger MP at 1268.6

• 13 Day SMA at 1263.6

The Trade: This is an ultra short-term scalping trade on the release of the FOMC minutes. Timing is everything here, and we are looking for maximum participation. A break below Tuesday’s low and the 62% Fibonacci number should work for a fast 10 ticks:

• Entry: Sell December Gold futures at 1272.6

• Profit Target:     1271.6

• Stop Loss: Variable, do not exceed 1:1 risk/reward. If elected, this will be an extremely hot zone. The potential for a fast, large retracement is present. Play it tight.

High levels of participation should garner a quick 10 tick profit from this short sell. There will be a bulk of orders at 1272.6. If you are going to take the scalp, I recommend getting your orders in the queue now.

ABOUT THE AUTHOR See More

Shain Vernier

US Analyst

Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.

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